African Development Bank has agreed to support the $5bn Nacala corridor rail and port project in Mozambique with a $300m grant provided through its Private Sector Window.

The project will see the construction of a 912km rail line from the Tete province in the western part of Mozambique through Malawi to the Port of Nacala on the country’s eastern coast.

It is also set to involve the construction of a deepsea port and associated terminal infrastructure in Nacala.

"This project can provide wider benefits to Mozambique, Malawi and Zambia, and allow Mozambique to fulfil its ambition to be a regional gateway to world markets."

African Development Bank Mozambique Country manager Pietro Toigo said: “This project supports two of the High 5s that guide the Bank’s contribution to the Sustainable Development Goals in Africa.

“By providing a rail link across Mozambique and Malawi with a possible extension to Zambia it will help Integrate Africa, and by opening up markets for agricultural commodities it will help feed Africa.”

The Government of Mozambique has signed the deal for the project’s development as part of a transaction that the involved Japanese Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI) and the Export Credit Insurance Corporation of South Africa (ECIC), as well as other commercial banks.

Mozambican Minister of Transport Carlos Mesquita said:  “This project can provide wider benefits to Mozambique, Malawi and Zambia, and allow Mozambique to fulfil its ambition to be a regional gateway to world markets.”

Coal exports are set to increase by 40% in the next year once the rail network becomes completely operational, providing crucial foreign earnings to the Mozambique economy.